3/26/2023 0 Comments Robo defense strategy forum![]() ![]() Reuse and recycling in the vehicle life cycle Such an approach can illuminate significant shifts in profitability across the value chain and provide a means to ensure resilience in supply so that automakers can continue to produce the vehicles that the global economy demands. It is also a lens that companies are applying to their businesses to spur innovation and assess potential disruption. (For more, read the Bain Brief “ A Chip Shortage Recovery Guide.”) Competition for virgin materials and rising insecurity in the supply of critical components compels automakers to develop other sourcing strategies, including recycling, reusing, and remanufacturing components.Ĭircularity is more than a series of measures to reduce waste and emissions. For example, semiconductor shortages have hurt auto sales across regions. Recent supply chain disruptions have emphasized its vulnerability. Yet the industry faces severe challenges responding to this demand if it takes a business-as-usual approach. Mobility is a fundamental need and will fuel the demand for cars and trucks for decades to come. The Circularity Gap Report 2021, Circle Economy In 2019, the global economy consumed more than 100 billion tons of resources-primarily virgin metal ores, fossil fuels, biomass and minerals-and only 8.6% of this was cycled back into use. Because of this lead, the entire global sector can learn by looking at what Europe has accomplished and where progress can be made in the years ahead. These policies will continue to evolve over the coming decade, creating a strategic opportunity for companies that navigate the transition early. (Bain uses the Circular Transition Indicators methodology, as developed by the World Business Council on Sustainable Development.) While EU policy initially focused on vehicles at the end of their useful lives and battery recycling, it now extends to the design phase with recycled content mandates and considers the recyclability of the full vehicle. The sector is responsible for about 10% of the world’s material footprint, so circularity is also key to decoupling the need for transportation from material consumption.Įurope’s automakers are leaders in circularity, with a total circularity rate of 40% (calculated as the weighted average of the percentage of circular material inflows and outflows), driven in part by strong regulation. Because mobility represents a significant share of global emissions (about 30%), any comprehensive approach to mitigating climate change must substantially reshape the ways that vehicles are produced, used, and recycled. ![]() Full circularity includes adhering to principles of circular design (for example, reducing the need for materials, cutting waste, and increasing the potential for end-of-life reuse and recycling), increasing the amount of recycled content in production, and deploying business models that improve vehicle utilization-meaning, they are used more hours of the day. In the mobility sector, circularity means more than just recycling the parts from scrap vehicles. Many automakers have committed to programs to enhance circularity, including using more recycled materials and remanufactured components in production, and better managing the reclamation of materials from vehicles at the end of their useful lives. Automakers around the world are looking for ways to increase circularity in order to reduce waste and Scope 3 emissions, strengthen supply chain resilience, and generate new value as they transition to a low-carbon future. ![]()
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